The kiwi dollar dropped to 69.65 US cents as at 8am in Wellington from 70.13 US cents late yesterday. Photo: Lynn Grieveson

The New Zealand dollar fell to a new four-month low, joining a sell-off in commodity-linked currencies after US President Donald Trump said the US would pull out of an agreement over Iran's nuclear programme and reimpose sanctions on Tehran immediately.

The kiwi dollar dropped to 69.65 US cents as at 8am in Wellington from 70.13 US cents late yesterday. The trade-weighted index fell to 73.04 from 73.38.

Trump described the international agreement over Iran, which was signed off by former President Barack Obama, "a horrible one-sided deal that should have never, ever been made." Crude oil fell 0.7 percent and the CRB Index of 19 commonly traded commodities fell 0.8 percent. The Canadian and Australian dollars also fell. Traders in New Zealand are now focused on the Reserve Bank's monetary policy statement tomorrow, the first for new governor Adrian Orr, which is likely to maintain the view weak inflation means interest rates must stay low.

"Markets were focused on headlines surrounding the US-Iran nuclear deal and associated sanctions overnight," said Con Williams, rural economist at ANZ Bank New Zealand, in a note. The kiwi fell with "geopolitical risk on the rise. Expect NZD to trade with global risk sentiment – which is jittery – before Adrian Orr’s first RBNZ MPS tomorrow morning."

Weak inflation remains embedded in New Zealand company expectations, the Reserve Bank's survey of expectations showed. Firms see the consumers price index reaching 1.8 percent over the coming year, marginally lower than the 1.86 percent pace predicted in the March quarter. Two-year ahead inflation expectations also declined to 2.01 percent from 2.11 percent, the midpoint of the central bank's 1-to-3 percent target band.

Today, retail spending on electronic cards for April are expected to show no change in the month after a 1 percent gain in March.

The New Zealand dollar traded at 93.45 Australian cents from 93.49 cents late yesterday. The kiwi fell to 51.40 British pence from 51.75 pence and slipped to 58.73 euro cents from 58.85 cents. It fell to 4.4373 yuan from 4.4636 yuan and dropped to 76 yen from 76.47 yen.